Selling to SMB Market vs. Fortune 1000 Market

If you’ve ever read one of my articles, posts, or white papers on small business technology providers, you know that I feel very strongly that most small VARs, network integrators, and IT consultants should not pursue Fortune 1000 accounts or government bids.

Small technology providers should instead focus their business development activities on the SMB market (small- and medium-sized businesses), where there’s a much simpler and faster IT sales process. The decision maker is often an owner, and the IT procurement politics simply don’t reside...at least most of the time.

Introducing Jennifer in the Supply Chain Department

The video features Jennifer in the “supply chain department.” The mission of Jennifer’s department is “to optimize the value we receive for the money that we redirect to our suppliers.”

Of course, more down-to-earth small business owners hiring for a position like Jennifer’s would call the job title a purchasing manager, whose primary role is to get their employer the best product and services at the best prices.

The scenario: “OK, let me see if I have this straight. You have a client commitment to bring a system online by the end of the month; otherwise you will be faced with missed service level agreement penalties. You have not begun the project, and it is due by the end of the month. It’s a new supplier that we do not have any experience with. The ‘supplier risk department’ has yet to perform a supplier risk assessment. The capital approval you have received is not sufficient to cover what you require because your project requires more equipment than was originally estimated. You had dinner with the supplier this evening. The supplier has to have his order by tomorrow. The supplier has warned you that the software is in short supply, and that there is a pending price increase. The supplier also knows that he is the supplier of choice.”

Meet Phil, the Opportunistic Sales Rep from the Software Vendor

In the next scene (“meanwhile back at the sales office”), Phil’s company is far from meeting its quota. Phil’s boss wants to be told that his company is “in the running” on the financial application deal.

When Phil is asked to qualify the opportunity, he grades the prospect a “solid A” because “it turns out they have a client commitment that they put off until the last minute. I hate to admit it, but this was more like order-taking than selling. I convinced the business owner that the product was in short supply. I told him that if he did not get the order to us by tomorrow, he’d be facing a missed delivery date, as well as a price increase. My plan is to charge him full list-price and remind him of our supply challenges. I’m meeting with a purchasing bureaucrat at 9 tomorrow morning. I will be out of there with a PO in my hand by 10.”

Now bear in mind, Phil does not have the deal in hand yet. Phil **thinks** the IT sales process is just about complete, but he has yet to meet Jennifer, who’s about to stick a pretty big pin in the fictional software scarcity and invented price increase.

The Bottom Line

Selling to small- and medium-sized business (SMB) owners is vastly different than selling to prospective client accounts with procurement officers or “supply chain departments.”

The political environment and its resulting IT sales process are much simpler in smaller organizations than larger accounts. Of course, in the SMB space, you may not be regularly selling six- and seven-figure projects. But then again, you won’t have to resort to the mega-sleazy sales tactics that Phil’s company utilized, or go 10 rounds with a supply chain manager.

What’s your favorite part of the IT sales process? And does your company target SMB prospects or Fortune 1000 prospects? Please share your thoughts in the COMMENTS section.